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Spanish and Portuguese Jews, also called Western Sephardim, are a distinctive sub-group of Iberian Jews who are largely descended from Jews who lived as New Christians in the Iberian Peninsula during the immediate generations following the forced expulsion of unconverted Jews from Spain in 1492 and from Portugal in 1497.
Although the 1492 and 1497 expulsions of unconverted Jews from Spain and Portugal were separate events from the Spanish and Portuguese Inquisitions (which was established over a decade earlier in 1478), they were ultimately linked, as the Inquisition eventually also led to the fleeing out of Iberia of many descendants of Jewish converts to Catholicism in subsequent generations.
Despite the fact that the original Edicts of Expulsion did not apply to Jewish-origin New Christian conversos —as these were now legally Christians— the discriminatory practices that the Inquisition nevertheless placed upon them, which were often lethal, put immense pressure on many of the Jewish-origin Christians to also emigrate out of Spain and Portugal in the immediate generations following the expulsion of their unconverted Jewish brethren.
The Alhambra Decree (also known as the Edict of Expulsion) was an edict issued on 31 March 1492, by the joint Catholic Monarchs of Spain (Isabella I of Castile and Ferdinand II of Aragon) ordering the expulsion of all unconverted practicing Jews from the Kingdoms of Castile and Aragon, including from all its territories and possessions, by 31 July of that year. The primary purpose of the expulsion was to eliminate the influence of unconverted Jews on Spain's by then large Jewish-origin New Christian converso population, to ensure that the prior did not encourage the latter to relapse and revert to Judaism.
Over half of Spain's Jewish origin population had converted to Catholicism as a result of the religious anti-Jewish persecution and pogroms which occurred in 1391. As a result of the Alhambra decree and persecution in prior years, it is estimated that of Spain's total Jewish origin population at the time, over 200,000 Jews converted to Catholicism, and initially remained in Spain. Between 40,000 and 80,000 did not convert to Catholicism, and by their steadfast commitment to remain Jewish were thus expelled. Of those who were expelled as unconverted Jews, an indeterminate number nonetheless converted to Catholicism once outside Spain and eventually returned to Spain in the years following the expulsion due to the hardships many experienced in their resettlement. Many of Spain's Jews who left Spain as Jews also initially moved to Portugal, where they were subsequently forcibly converted to the Catholic Church in 1497.
Most of the Jews who left Spain as Jews accepted the hospitality of Sultan Bayezid II and, after the Alhambra Decree, moved to the Ottoman Empire, where they founded communities openly practising the Jewish religion; they and their descendants are known as Eastern Sephardim.
During the centuries following the Spanish and Portuguese decrees, some of the Jewish-origin New Christian conversos started emigrating from Portugal and Spain, settling until the 1700s throughout areas of Western Europe and non-Iberian realms of the colonial Americas (mostly Dutch realms, including Curaçao in the Dutch West Indies, Recife in Dutch areas of colonial Brazil which eventually also fell to the Portuguese, and New Amsterdam which later became New York) forming communities and formally reverting to Judaism. It is the collective of these communities and their descendants who are known as Western Sephardim, and are the subject of this article.
As the early members of the Western Sephardim consisted of persons who themselves (or whose immediate forebears) personally experienced an interim period as New Christians, which resulted in unceasing trials and persecutions of crypto-Judaism by the Portuguese and Spanish Inquisitions, the early community continued to be augmented by further New Christian emigration pouring out of the Iberian Peninsula in a continuous flow between the 1600s to 1700s. Jewish-origin New Christians were officially considered Christians due to their forced or coerced conversions; as such they were subject to the jurisdiction of the Catholic Church's Inquisitorial system, and were subject to harsh heresy and apostasy laws if they continued to practice their ancestral Jewish faith. Those New Christians who eventually fled both the Iberian cultural sphere and jurisdiction of the Inquisition were able to officially return to Judaism and open Jewish practice once they were in their new tolerant environments of refuge.
As former conversos or their descendants, Western Sephardim developed a distinctive ritual based on the remnants of the Judaism of pre-expulsion Spain, which some had practiced in secrecy during their time as New Christians, and influenced by Judaism as practiced by the communities (including Sephardic Jews of the Ottoman Empire and Ashkenazi Jews) which assisted them in their readoption of normative Judaism; as well as by the Spanish-Moroccan and the Italian Jewish rites practiced by rabbis and hazzanim recruited from those communities to instruct them in ritual practice. A part of their distinctiveness as a Jewish group, furthermore, stems from the fact that they saw themselves as forced to "redefine their Jewish identity and mark its boundaries [...] with the intellectual tools they had acquired in their Christian socialization" during their time as New Christian conversos.

Source: Wikipedia